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What do we really know about the determinants of public spending on education? A robustness check of three empirical models

Spantig, Lisa LU (2013) NEKN01 20131
Department of Economics
Abstract
A variety of theories concerning the determinants of public spending on education exist, but an encompassing one has yet to be formulated. Frequently examined determinants are regime type and globalization, but the empirical results for these variables are not consistent across studies. This paper contributes to the literature by anecdotally demonstrating that insufficient theory can lead to a lack of empirical robustness. Thereto, three different empirical models are replicated and altered. It is shown that changes in the sample, the inclusion of an additional variable or a different measurement method can lead to differing estimates. This instability is sometimes exacerbated by statistical shortcomings such as autocorrelation. In this... (More)
A variety of theories concerning the determinants of public spending on education exist, but an encompassing one has yet to be formulated. Frequently examined determinants are regime type and globalization, but the empirical results for these variables are not consistent across studies. This paper contributes to the literature by anecdotally demonstrating that insufficient theory can lead to a lack of empirical robustness. Thereto, three different empirical models are replicated and altered. It is shown that changes in the sample, the inclusion of an additional variable or a different measurement method can lead to differing estimates. This instability is sometimes exacerbated by statistical shortcomings such as autocorrelation. In this study, both the results for regime type, measured by democracy, and globalization, captured by log trade openness, vary across samples and models, showing positive or insignificant effects. Regarding log trade openness, cross-country and within-country effects seem to differ systematically, which is contrary to previous findings and inexplicable by current theory. Given the lack of robustness, interpretation of results has to be careful and a consistent theory is needed as guidance for empirical analysis with external validity. (Less)
Please use this url to cite or link to this publication:
author
Spantig, Lisa LU
supervisor
organization
course
NEKN01 20131
year
type
H1 - Master's Degree (One Year)
subject
keywords
Replication, Panel Data Analysis, Robustness, Public Spending on Education, Trade Openness
language
English
id
4004688
date added to LUP
2013-09-17 16:39:37
date last changed
2013-09-17 16:39:37
@misc{4004688,
  abstract     = {A variety of theories concerning the determinants of public spending on education exist, but an encompassing one has yet to be formulated. Frequently examined determinants are regime type and globalization, but the empirical results for these variables are not consistent across studies. This paper contributes to the literature by anecdotally demonstrating that insufficient theory can lead to a lack of empirical robustness. Thereto, three different empirical models are replicated and altered. It is shown that changes in the sample, the inclusion of an additional variable or a different measurement method can lead to differing estimates. This instability is sometimes exacerbated by statistical shortcomings such as autocorrelation. In this study, both the results for regime type, measured by democracy, and globalization, captured by log trade openness, vary across samples and models, showing positive or insignificant effects. Regarding log trade openness, cross-country and within-country effects seem to differ systematically, which is contrary to previous findings and inexplicable by current theory. Given the lack of robustness, interpretation of results has to be careful and a consistent theory is needed as guidance for empirical analysis with external validity.},
  author       = {Spantig, Lisa},
  keyword      = {Replication,Panel Data Analysis,Robustness,Public Spending on Education,Trade Openness},
  language     = {eng},
  note         = {Student Paper},
  title        = {What do we really know about the determinants of public spending on education? A robustness check of three empirical models},
  year         = {2013},
}